Bookstore Business Plan Template

Bookstore Business Plan

Starting or expanding a bookstore requires a thoughtful business plan to lead you to long-term success and growth.

The following bookstore business plan template outlines the key elements to include in a comprehensive plan. This template can be used to create a business plan for any type of bookstore, including but not limited to: independent bookstores, specialty stores, online bookstores, and community-oriented literary spaces.

You can download our Bookstore business plan template (including a full, customizable financial model) to your computer here.
 

Sample Bookstore Business Plan

I. Executive Summary

Business Overview

[Company Name], located at [insert location here] is a new, independent book store focused on staff curated book selections. The cozy bookstore offers a book club, author events and children’s story hour.

Products and Services

[Company Name]will offer a wide selection of books including children’s literature, modern fiction, true crime, cook books, foreign language titles and art books. The store will also feature monthly author events and weekly children’s story time. Gift wrapping service will be provided, and gift certificates will be sold to encourage customers to buy for the children of friends and family members.

Customer Focus

[Company Name] will primarily serve the residents who live within a 10- mile radius of our store. The demographics of these customers are as follows:

• 416,000 residents
• 1,750 workers (who do not live the neighborhood)
• Average income of $54,700
• 38.9% married
• 49.6% in Management/Professional occupations
• Median age: 34 years

Management Team

[Company Name]is led by [Founder’s Name] who has been in the book business for 20 years. While [Founder] has never run a book store himself, he was an assistant manager at another book store previously. As such [Founder] has an in-depth knowledge of the book business including the operations side (e.g., running day-to-day operations) and the business management side (e.g., staffing, marketing, etc.).

Success Factors

[Company Name] is uniquely qualified to succeed for the following reasons:

• There is currently no independent book store in the community we are entering. In addition, we have surveyed the local population and received extremely positive feedback saying that they explicitly want to frequent our business when launched.

• Our location is in a high-volume area with little direct traffic, and will thus be highly convenient to significant numbers of passersby each day.

• The management team has a track record of success in the book business.

• The book store business is a proven business and has succeeded in communities throughout the United States.

Financial Highlights

[Company Name] is currently seeking $330,000 to launch. Specifically, these funds will be used as follows:

• Store design/build: $165,000

• Working capital: $165,000 to pay for marketing, salaries, and land costs until [Company Name] reaches break-even.

Top line projections over the next five years are as follows:

 

II. Company Overview

Who is [Company Name]?

[Company Name]is a new, independent book store focused staff-curated book selections. The cozy bookstore offers a book club, author events and children’s story hour.

[Company Name] was founded by [Founder’s Name]. While [Founder’s Name] has been in the book business for some time, it was in [month, date] that he decided to launch [Company Name]. Specifically, during this time, [Founder] took a trip to Fort Lauderdale, FL. During his trip, [Founder’s Name] frequented an independently-owned book store that enjoyed tremendous success. After several discussions with the owner of the store, [Founder’s Name] clearly understood that a similar business would enjoy significant success in his hometown.

Specifically the customer demographics and competitive situations in the Fort Lauderdale location and in [insert location here] were so similar that he knew it would work. Furthermore, after surveying the local population, this theory was proven.

[Company Name]’s History

Upon returning from Fort Lauderdale and surveying the local customer base, [Founder’s Name] incorporated [Company Name] as an S-Corporation on [date of incorporation].

[Founder’s Name] has selected three initial locations and is currently undergoing due diligence on each property and the local market to assess which will be the most desirable location for the store.

Since incorporation, the company has achieved the following milestones:

• Developed the company’s name, logo and website located at www…

• Determined the list of products to be offered

• Determined equipment and inventory requirements

• Identified 20 potential suppliers and received preliminary interest from them

[Company Name]’s Products

Below is [Company Name]’s initial list or product categories:

• Children’s Books
• Cookbooks
• Modern Fiction Books
• Historical Fiction Books
• True Crime Books
• Foreign Language Books
• Self-Help Books
• History & Art Books
• Magazines
• Toys
• Gifts

The store will offer free gift wrapping service and sell gift certificates in any amount desired. Transactions will be completed by skilled salespeople on the floor of the store, who will offer a high level of customer service and develop ongoing relationships with customers.

Store Design

[Company Name] will develop a 5,000 square foot store whose key elements will include the following:

• Main Bookstore
• Reading Nook
• Storage Room
• Check-Out Counter
• Restrooms

The retail location has 20 dedicated parking spots which should suffice even in peak hours.

[Company Name] plans to be open 7 days a week, from 10 AM to 7 PM. As demand dictates, we may extend or reduce our hours.

 

III. Industry Analysis

[Company Name] directly or indirectly competes with all book stores nearby our store. Competition will come from department stores, specialty children’s stores, and discount mass retail stores. Direct competition will come from companies offering book selections similar to [Company Name].

Over the next five years, industry revenue is projected to increase an annualized 2% to $16.5 billion.

Key industry drivers include an increase in disposable income, leisure time and the increase in self-publishers.

 

IV. Customer Analysis

Demographic Profile of Target Market

[Company Name] will serve the residents of [company location] and the immediately surrounding areas.

The area residents we serve are affluent and are expected spend more on books per capita than the national averages.

The precise demographics of the town in which our retail location resides is as follows:

Customer Segmentation

We will primarily target the following three customer segments:

1. Wealthy Parents
2. Twenty and Thirty-Something
3. Grandparents

 

V. Competitive Analysis

Direct & Indirect Competitors

The following book stores are located within a 10-mile radius of [Company Name], thus providing either direct or indirect competition for customers:

Barnes & Noble Inc.

Barnes & Noble (B&N) is the leading book retailer in the United States, with over 640 stores across all 50 states and Washington, DC. The company offers trade books, paperbacks, e-books, e-readers, magazines, newspapers and other content across its distribution platform, which includes general retail book stores and an e-commerce website. Barnes & Noble also owns Sterling Publishing, a leading publisher of nonfiction books.

After spinning off its college bookstore segment in 2015, the company currently operates through its retail and NOOK segments. Its retail segment consists of both its 640 brick-and-mortar stores and the company’s website, bn.com. The website is one of the internet’s largest e-commerce sites, generating an estimated $886.0 million in 2015. The company’s NOOK segment includes the sale of the NOOK e-reader and revenue generated from e-books and other digital media through the company’s mobile platform. While the company’s retail segment accounts for an overwhelming majority of company revenue, the NOOK segment is used to compete with Amazon’s Kindle platform.

Books-A-Million

Founded in 1917, Books-A-Million is one of the leading chain book retailer in the United States. The company employs 5,500 full-time and part-time workers across its 250 locations. The retailer operates primarily in the Southeast United States through its traditional store and superstore formats. The company’s traditional stores are smaller and are often located in enclosed malls. Books-A-Million’s super stores, conversely, are standalone facilities that are larger and offer space for browsing, reading, shopping and various promotional events. Over the past five years, Books-A-Million has opened, closed and relocated a variety of stores to rescue struggling profit margins. Additionally, the company increasingly promotes its “Millionaire’s Club” loyalty program to attract repeat customers. These various restructuring attempts have caused the company’s revenue to fluctuate over the past five years. In 2016, company sales are expected to reach $452.9 million.

Powell’s Books

Founded in 1971 in Portland, OR, Powell’s Books is one of the top independent booksellers in the United States. The company revolutionized the book selling industry by offering both new and used hardcover and paperback titles on the same shelf. The store is immensely popular with both the local community and visiting patrons. With a selection of books in over 120 subject areas and 3,500 subsections, the store offers an expansive array of both bestselling authors along with less common niche titles. In 1994, the company launched its e-commerce site, and, within two years, its entire collection was available for purchase online. Contrary to the overall trend of the industry, this small company has thrived over the past five years.

Competitive Advantage

[Company Name] enjoys several advantages over its competitors. These advantages include:

• Book Lover Focus: [Company Name] will focus solely on book lovers, which is a fast-growing market segment by revenue. By focusing on book lovers, vs. the mass market, we are able to provide a personalized, meaningful shopping experience.

• Management: Our management team has years of book retail experience that allows us to sell to and serve customers in a much more sophisticated manner than our competitors.

• Relationships: Having lived in the community for 25 years, [Founder’s Name] knows all the local leaders and newspapers, as well as suppliers. As such, it will be relatively easy for us to build branding and awareness of our store.

 

VI. Marketing Plan

You can download our Bookstore business plan template (including a full, customizable financial model) to your computer here.

The Marketing Plan describes the type of brand [Company Name] seeks to create and the Company’s planned promotions and pricing strategies.

The [Company Name] Brand

The [Company Name] brand will focus on the Company’s unique value proposition:

• Offering personalized, curated book selections in an intimate environment

• Rotating books to always offer the latest selections

• Providing excellent customer service

Promotions Strategy

[Company Name] expects its target market to be individuals living within a 10-mile radius of its store. The Company’s promotions strategy to reach these individuals includes:

Direct Mail

[Company Name] will blanket neighborhoods surrounding its locations with direct mail pieces. These pieces will offer discounts and/or provide other inducements for people to visit the store.

Public Relations

We will contact all local and area newspapers and television stations and send them a press release describing the opening and unique value proposition of [Company Name].

Advertising

[Company Name] will initially advertise in local newspapers and sponsor community events in order to gain awareness.

Ongoing Customer Communications

[Company Name] will maintain a website and publish a monthly email newsletter to tell customers about new events, products, and more.

Pre-Opening Events

Before opening the store, [Company Name] will organize pre-opening events designed for local merchants and press contacts to create buzz and awareness for [Company Name].

Pricing Strategy

[Company Name] pricing will be appropriate for the high quality and level of service associated with the store. Pricing will be on par with Barnes and Noble.

 

VII. Operations Plan

Functional Roles

In order to execute on [Company Name]’s business model, the Company needs to perform many functions including the following:

Administrative Functions

• General & administrative functions including legal, marketing, bookkeeping, etc.

• Sourcing suppliers and managing supplier relations

• Hiring and training staff

Retail Functions

• Customer service and check-out

• Gift wrapping

• Gift certificate program management

• Display rotation and design

• Janitor/maintenance personnel to keep the store clean

Milestones

[Company Name] expects to achieve the following milestones in the following [] months:

 

VIII. Management Team

Management Team Members

[Company Name]is led by [Founder’s Name] who has been in the book business for 20 years. While [Founder] has never run a retail store himself, he was an assistant manager at another book store previously. As such [Founder] has an in-depth knowledge of the book business including:

• Store operations and management
• Floor sales
• Display design
• Retail marketing
• Hiring and training workers
• Book trends

[Founder] has personal relationships with a variety of suppliers and authors.

[Founder] graduated from the University of ABC where he majored in Communications.

Hiring Plan

[Founder] will serve as the store manager. In order to launch the store, we need to hire the following personnel:

• Assistant Manager (Will handle much of store operations and manage store on [Founder]’s day’s off)

• Check-out and Floor Staff (3 to start)

• Part-Time Bookkeeper (will manage accounts payable, create statements, and execute other administrative functions)

 

IX. Financial Plan

Revenue and Cost Drivers

[Company Name]’s revenues will come from the sale of children’s clothing to customers.

The major costs for the company will be cost of goods sold (supplier costs), staff salaries, and rent for a prime location. In the initial years, the company’s marketing spend will be high, as it establishes itself in the market.

Capital Requirements and Use of Funds

[Company Name] is seeking a total funding of $330,000 to launch its store. The capital will be used for funding capital expenditures, manpower costs, marketing expenses and working capital.

Specifically, these funds will be used as follows:

• Store design/build: approximately $165,000

• Working capital: approximately $165,000 to pay for Marketing, salaries, and lease costs until [Company Name] reaches break-even

Key Assumptions & Forecasts

Below please find the key assumptions that went into the financial forecast and a summary of the financial projections over the next five years.

5 Year Annual Income Statement

5 Year Annual Balance Sheet

5 Year Annual Cash Flow Statement